Index Agro secures cut-off price at Tk62
The bids went as high as Tk100 and as low as Tk11 for each primary share with a face value of Tk10
Highlights
- Aims to raise Tk50 crore from stock market
- EPS was Tk7.07 as of 30 June, 2019
- NAV per share was Tk45.03
- AFC Capital, EBL Investments issue managers
Eligible institutional investors (EII), through their bidding, have set the cut-off price for Index Agro Industries Ltd primary shares at Tk62 each.
The cut-off price is the price point where EIIs absorb all the primary shares allocated for them in an initial public offering (IPO), under the book building method, where general investors can buy IPO shares at a 10% discount compared to the set cut-off price.
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The poultry and fish feed maker is going to collect Tk50 crore through the ongoing IPO to construct buildings, execute other civil work alongside acquiring new machinery and equipment, as well as meet the expenditures of the IPO process.
Based on the approval from the Bangladesh Securities and Exchange Commission (BSEC), Index Agro's 72-hour bidding on the electronic platform of stock exchanges began on 1 November, 2020 and ended on 4 November.
The bidding reflected a diversified view of eligible investors on the company's valuation. The bids went as high as Tk100 and as low as Tk11 for each primary share with a face value of Tk10.
Currently, the bidders above the cut-off price have to buy the shares at the exact rate they offered. Previously in Bangladesh, all the bidders at or above the cut-off price point were entitled to buy the new shares at the cut-off price.
According to the data from the stock exchanges' joint Electronics Subscription System (ESS), 191 EIIs submitted their bids worth over Tk93 crore against their quota for Tk25 crore shares of Index Agro.
However, the second highest number of bids was at Tk51 and they failed to secure their stake at the company as the price was below the cut-off point.
According to the company's audited financial statement as of 30 June, 2019, its consolidated earnings per share (EPS) was Tk7.07. Its weighted average EPS for the last five years was Tk5.60.
The company's net asset value (NAV) per share, including revaluation surplus, was Tk45.03, which was Tk44.06, excluding the surplus.
Local investment banks AFC Capital Limited and EBL Investments Limited are the joint issue managers for the company's IPO.
Index Agro Industries Limited was incorporated in Bangladesh on 13 September, 2000. The company started commercial operations on 1 July, 2004.
The principal activities of the company are manufacturing and selling poultry feed, fish feed and producing day-old chicks.
Though it has no subsidiary company, it has an associate company named X-Ceramics Ltd which is engaged in manufacturing ceramic tiles in Bangladesh.
